NEW DELHI: Indian investors feel that most listed companies have weak governance standards where insider trading, accounting fraud, and selling of company assets without the shareholders’ knowledge is rampant, according to a LocalCircles survey. More than 21,000 shareholders who were quizzed also raised concerns over the role of independent directors.
“About 79 per cent of individual shareholders believe that the constitution of the Board of Directors of most Indian corporates is tilted towards promoters as many independent directors aren’t really independent,” said the report. For instance, the role of independent directors in Future Retail has recently been questioned and debated in courts.
The survey also showed that 65 per cent of individual shareholders believe that independent directors in listed companies are not acting to protect the interest of minority shareholders. The objective of the report, which comes a day ahead of good governance day observed on December 25, is for the government to take action and increase shareholder trust in corporates and markets, LocalCircles said.
The survey also found that 82 per cent of individual shareholders who participated believed that insider trading is prevalent in publicly traded companies operating in India.